Disability Insurance, Medical Malpractice Insurance and Life Insurance: What Physicians Need to Know
How do you find the best disability, life and medical malpractice insurance that protects your ability to practice and support your loved ones? First learn what you need from insurance, how much it costs and what doctors should look for in a policy. Then talk to a reputable advisor to find the best insurance products for physicians, a key part of mastering personal finance.
AAFP Insurance offers members free advising and special coverage discounts from professionals who understand every point in your journey, from medical school to retirement. State medical societies and other professional organizations may also offer disability, life and medical malpractice insurance for physicians.
Jump to a Section: Physician Disability Insurance | Medical Malpractice Insurance | Life Insurance
Physician Disability Insurance
What is disability insurance and why do physicians need it?
Your biggest assets are yourself and your future earning potential.
If a disability stops you from working, disability insurance will kick in to protect your future income after a waiting period.
Doctor disability insurance usually covers 60% of your pre-disability earnings.
Own-occupation disability insurance vs. any-occupation disability insurance is a crucial consideration for every physician.
FPM offers tips on choosing a physician disability insurance policy, avoiding pitfalls and more in “A Practical Guide to Physician Disability Insurance.”
What’s the average cost of physician disability insurance?
The cost of disability insurance can vary greatly. While price is important, your goals and other personal factors are bigger considerations.
How much doctor disability insurance costs — and its value to you — depends on your age and your financial planning. Having a lot of assets can push coverage to a point of diminishing returns.
When you’re a resident physician, you’ll probably get a small policy for doctor disability insurance through your residency program. You can also look to secure supplemental long-term disability insurance that comes with a discount when purchased during or shortly after residency. This will help lower the price of this important coverage throughout your career.
When you’re an early-career physician after residency, it’s almost always worth purchasing disability insurance. Disability coverage might be part of your compensation package, but have the policy reviewed by a professional who understands current trends.
You might need to purchase extra protection even if your employer or residency program offers disability coverage.
Talk with a professional advisor who knows what disability insurance products and features doctors need.
What should physicians look for in a disability insurance policy?
Check whether your disability insurance provides what you’ll need if you can’t work as a doctor. Does it impose:
Monthly income caps — which might be much less than your pre-disability earnings?
Taxable benefits?
Any-occupation rather than own-occupation language, which could limit payments if you’re able to work in a non-physician job?
A time limit on own-occupation benefits?
Medical Malpractice Insurance
What is medical malpractice insurance and why do physicians need it?
You need medical malpractice insurance as a physician because lawsuits for injuries from a mistake or accident are costly.
Medical malpractice insurance protects your finances by paying all or part of the cost of your defense and judgements against you, depending on your policy’s coverage limits.
What’s the average cost of medical malpractice insurance?
The price of medical malpractice insurance ranges broadly.
Your history of claims, your specialty and even the hours you work affect policy prices.
Most employers provide the coverage you need, often including medical malpractice tail coverage that takes effect when you leave your job.
What should physicians look for in a medical malpractice insurance policy?
Check whether your employment contract provides medical malpractice tail coverage for when you leave your job, which some states require.
You might need to purchase additional medical malpractice insurance if you work as a physician outside your main practice.
If you’re in private practice, it’s worth periodically checking what other insurance carriers are offering.
Talk with a reputable insurance advisor when you have questions about your malpractice insurance policy.
Life Insurance
What is life insurance and why do physicians need it?
Life insurance provides your loved ones financial protection if you die unexpectedly.
Make sure your life insurance policy covers your family’s needs, such as income replacement, debt pay-off and education funding.
What’s the average cost of life insurance?
The price of life insurance depends on factors including your age, your health history and the type of policy you need, such as permanent life or term life.
Consider long-term goals, your dependents’ ages and the effects of inflation as you consider how much life insurance coverage you need.
Talk with a reputable insurance advisor about the best life insurance products for your long-term financial plan.
What should physicians look for in a life insurance policy?
Make sure you choose a financially sound, trustworthy life insurance carrier. There’s junk out there.
Review your beneficiary list periodically and update it to include any new children or changes in your marital status.
If you’re a business owner, be sure you purchase life insurance in a way that lets your beneficiaries claim payments tax-free.
A Practical Guide to Physician Dsiability Insurance | FPM Journal